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Are Cats Happy in Apartments? 21 Experts Weigh In
Are cats happy in apartments? Twenty-plus experts weigh in on the thoughts inside your feline’s mind.
The post Are Cats Happy in Apartments? 21 Experts Weigh In appeared first on The Rent.com Blog : A Renterâs Guide for Tips & Advice.
Dear Penny, Iâm 23 years old…
Dear Penny, Iâm 23 years old and make a $55,000 salary. Each year I can make upward of a 20% bonus, and Iâve always gotten it. I started investing in a Roth IRA last year and have managed to stay on track to max it out each year. I have a decent emergency fund of [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Buying Annuities in Your 401(k)
Despite the economic challenges presented by the COVID-19 pandemic, the vast majority of workers continued to contribute to their retirement plans in 2021, according to the Investment Company Institute. All told, Americans have more than $11 trillion stashed in plans offered through their jobs.
But even though workers get a lot of advice and encouragement on their journey to retirement, they are often left on the tarmac when they reach their destination. Historically, employers have provided little guidance on what retirees should do with the big pile of money theyâve accumulated over the past 40 or 50 years.Â
Now, a growing number of companies are providing workers with a way to turn a slice of their savings into a monthly paycheck in retirement. In addition to the usual choices of mutual funds and other investments, theyâre offering workers the option of investing in an annuity that can be converted into guaranteed income after they retire.Â
Retirees can already purchase annuities from a variety of insurance companies, of course, but few do, even though many retirement experts believe that annuitizing a portion of your savings reduces the risk that youâll run out of money in retirement. In large part, thatâs because the security that annuities provide comes with some caveats: In exchange for guaranteed payments, you must hand over a large lump sum to an insurance company, and you usually canât get that money back. In addition, some types of annuities are loaded with fees and restrictions that are often hard to decipher without professional help.
In the past, companies resisted offering annuities in their retirement plans because they feared they would be sued if the insurer went out of business. The 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act sought to address those concerns by providing employers that offer in-plan annuities a safe harbor from such lawsuits. To avoid liability, employers must still vet annuity providers to ensure that theyâve complied with state laws and have maintained healthy financial reserves.Â
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Annuity Offerings on the MenuÂ
Several companies that have added annuities to their lineups are offering them in their target-date funds. Target-date funds, which are owned by more than half of participants in 401(k) plans, provide a set-it-and-forget-it portfolio that gradually shifts to more-conservative assets as you near retirement.Â
For example, TIAA-CREFâs Secure Income Account, a deferred fixed annuity, replaces a portion of the fixed-income holdings in a target-date fund and accounts for 40% to 60% of the individualâs assets by the time the 401(k) owner retires, says Philip Maffei, managing director for corporate income products for TIAA-CREF. Upon retiring, the participant would have a choice of annuitizing all of the money in the account, annuitizing just a portion of it or taking a lump sum, Maffei says.Â
Fidelity Investments, one of the nationâs largest 401(k) plan managers, is providing its 401(k) clients with a menu of immediate annuities from up to five different insurance companies. The annuities are available to workers age 59½ and older, who will have the option of converting any portion of their savings to an annuity when they retire. Funds that arenât converted can remain invested in the Fidelity plan.Â
Learning From Teachersâ Bad Experience With Annuities
Millions of educators already own annuities in 403(b) plans, the retirement accounts typically offered to public school teachers, and a lot of them would give their results a failing grade. Many school districts have turned the job of offering retirement plans over to sales agents who promote high-cost equity-indexed and variable annuities. Teachers who are unhappy with their investments often discover that moving their money to a lower-cost option will trigger hefty surrender fees.
Proponents of annuities in 401(k) plans say workers are offered plenty of protections from those types of problems. Even with the safe harbor provided by the SECURE Act, companies that offer 401(k) plans are required by law to act in the best interest of their employees, which means they must vet their planâs investment options, including annuities.Â
That kind of vetting could also give annuities offered through retirement plans an edge over annuities purchased on the retail market, providers say. âHaving the plan sponsor play the vetting role gives a lot of peace of mind to participants that theyâre getting a good-quality annuity product,â says Keri Dogan, senior vice president of retirement income at Fidelity.
A financial planner can help individuals select annuities available on the open market, but not everyone can afford to hire an adviser, says Jeff Cimini, head of strategy and financial management at Voya Financial, which provides retirement, insurance and investment services. Annuities âare complex, and generally speaking, theyâre sold, not bought,â he says.Â
Employees who buy annuities through their retirement plan may also benefit from institutional pricing, which means theyâll pay lower fees than theyâd pay on the retail market, Dogan says. In addition, the SECURE Act mandates that annuities purchased in a 401(k) plan must be portable, which means employees who change jobs or retire can move their annuity to another plan or IRA without paying surrender charges or fees.
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The Fine Print: Annuities Can Be Complicated
Although lower costs and portability could make annuities offered through retirement plans more appealing, annuities are still complex products. Fees and other expenses arenât as transparent as they are for mutual funds and exchange-traded funds. In addition, annuitiesâincluding those offered in 401(k) plansâcome in a variety of flavors. TIAA-CREFâs Secure Income Account, for example, is a deferred fixed annuity that offers a guaranteed interest rate, which currently ranges from 3.4% to 3.65%, depending on the size of the plan, with the option of converting the balance to guaranteed income after retirement. While Fidelity is currently limiting its offering to immediate annuities, it plans to add a qualified longevity annuity contract (QLAC), an annuity that starts payouts when a participant reaches a specific age, typically 80 or older. (These types of annuities require a smaller outlay of funds than immediate annuities because of the possibility that the owner will die before payments begin.) Some plans are adding variable annuities, which provide some exposure to the stock market before converting to income in retirement.Â
If you decide to add an annuity to your portfolio, youâll also need to decide when (or whether) to annuitizeâthat is, convert it into a guaranteed income stream, a decision thatâs usually irrevocable. Complicating the decision is the current interest rate environment, which could depress the size of your monthly check, depending on when you annuitize an existing investment or purchase one that offers an immediate payout. In the case of immediate annuities, for example, payments are tied to rates for 10-year Treasuries, and while those rates are higher than they were a year ago, âtheyâre very likely to go higher in the future,â says Harold Evensky, a certified financial planner and chairman of Evensky & Katz/Foldes Financial.
While Evensky believes investing a portion of your savings in an immediate annuity can significantly reduce the risk that youâll run out of money in retirement, he says most retirees are better off waiting until at least age 70 to buy an annuity because payouts increase as you age. And if interest rates continue to rise, youâll also benefit from delaying payouts.Â
That means leaving your funds in your 401(k) for years after you retireâsomething many large plans are starting to encourage. Having more assets in their plans gives employers more clout when they negotiate fees and other services with fund managers.Â
A Snapshot of the Future?Â
Under a provision in the SECURE Act, companies are required to include an illustration in their retirement planâs quarterly or annual statements that estimates the amount of monthly income your balance would provide if you were to convert the funds to an annuity. While these illustrations could raise awareness about the value of annuitizing retirement income, retirement experts say theyâre primarily useful for older workers who have accumulated a significant balance. Without supplemental tools, such as projections of how much additional contributions would add to the balance, younger workers or new plan participants could end up with a âdiscouraging pictureâ of the amount of guaranteed income their savings would buy, the Insured Retirement Institute, a trade association, wrote in a comment letter to the Department of Labor.Â
Annuity providers are hopeful that the DOL will allow plans to include future contributions, company matches and investment returns in the income estimates. Participants in the Thrift Savings Plan, the federal governmentâs version of a 401(k) plan, already receive those kinds of projections in their plan statements, says Paul Richman, chief government and political affairs officer for the IRI. â
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Immediate Annuities
Annuity Income Projection
Retirement plan providers will soon be required to provide employees with an estimate of the amount of monthly income their current 401(k) balance would provide if they were to purchase an annuity that provides payouts immediately. The example below assumes the participant and the participantâs spouse (in the case of a joint life annuity) will be 67 on December 31, 2022.
Current account balance: $125,000
Single life annuity: $645 per month
Joint life annuity: $533 per month for participantâs life; $533 per month for spouse following participantâs death
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learning the LingoÂ
Types of Annuities
Here are some varieties of annuities that may be offered by your 401(k) plan:Â
Single-premium immediate annuity. Also known simply as an immediate annuity, you typically give an insurance company a lump sum in exchange for monthly payments for the rest of your life or for a specified period.
Deferred fixed annuity. These annuities offer a guaranteed interest rate over a specific period and can be converted into an income stream in retirement. Â
Qualified longevity annuity contract (QLAC). A type of deferred annuity thatâs funded with assets from your IRA or 401(k). You can invest up to 25% of your account (or $145,000, whichever is less) in a QLAC, and the funds will be excluded from the calculation to determine required minimum distributions. When you reach a specified age, which can be as late as 85, the funds will be converted into payments guaranteed to last for the rest of your life. The taxable portion of the money you invested will be taxed when you start receiving income. Â
Variable annuity. A type of deferred annuity that invests in mutual-fund-like subaccounts to create future income (usually in retirement).
What Is the Average Annual Income in America? -Salaries in the USA
Do You Qualify for Any of Juneâs Class-Action Settlements?
Some major brands â Apple, Noom, Chipotle and Ford, among others â have agreed to class action lawsuit settlements with claim deadlines coming up this month. Read on to find out if you qualify to claim some cash but act fast. Some of the deadlines come early in the month. Noom Autorenewal and Cancellation Policy [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Home Birth vs. Hospital Birth Costs – Is Natural Birthing with a Midwife For You?
Best Buy Kicks Off Heavy Week of Retail Earnings
The heaviest part of earnings season has passed, but there are still plenty of notable names left to report. Among the biggest companies on this week’s earnings calendar are electronics retailer Best Buy (BBY, $70.65), chipmaker Nvidia (NVDA, $163.85) and discount goods chain Dollar General (DG, $189.63).
First-quarter earnings season so far has been solid by just about any measure, says Jeff Buchbinder, equity strategist at independent broker-dealer LPL Financial.Â
An impressive 78% of S&P 500 companies have beat earnings estimates for the quarter, slightly outpacing the long-term average of 77%, Buchbinder says. And 74% of S&P 500 firms reported higher-than-expected revenue â beating the five-year average of 69%, he adds.
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“In this inflationary environment, the revenue is coming through,” the strategist says. “But it is profit margins that were the biggest test for corporate America this quarter, and companies passed that test with flying colors. Not only did margins hold up well quarter-over-quarter â falling less than anticipated â but analysts’ estimates for margins going forward still show margin expansion from current levels.”
Best Buy Q1 Earnings to Reflect Macro Headwinds, Tough Comps
It has been a heavy stretch for retail earnings, and based on the mixed results from Walmart (WMT) and Target (TGT), it was a tougher quarter than initially expected for many in the industry.
“U.S. retailers Target and Walmart presented a grim outlook at their earnings calls,” says the BCA Research Daily Insights team. “Although Q1 topline growth surprised to the upside, lingering pandemic supply-chain issues as well as higher freight, fuel and labor costs weighed down on both companies’ profits.”
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Wall Street will get a closer look at the group this week, with a number of retailers set to report. Among them is electronics retailer Best Buy, slated to unveil its first-quarter results ahead of Tuesday’s open.Â
“We see more downside than upside risk due to rising inflation and interest rates, affordability issues for key products, the Ukraine war further weighing on consumer confidence, and additional supply-chain issues in China,” says Wedbush analyst Seth Basham (Neutral).Â
And these pressures, as well as tough stimulus-related year-over-year comparisons, led to a sharp drop in store traffic trends in March, he adds.
For BBY’s first-quarter, analysts, on average, are anticipating a 26.9% year-over-year (YoY) drop in earnings to $1.63 per share. Revenue is expected to arrive at $10.4 billion (-10.3% YoY).
Nvidia’s Gaming Segment Could Drag on Otherwise Strong Quarter
Nvidia has a strong history of beating Wall Street’s estimates on both the top and bottom line. But Susquehanna Financial Group analyst Christopher Rolland (Positive) thinks the semiconductor stock is in for a tougher time when it reports its Q1 results after Wednesday’s close.Â
“Unlike recent quarters, we believe any significant beat and raise may be capped by gaming headwinds,” Rolland says.Â
In addition to noteworthy price drops for Nvidia cards over the last year, “we have also witnessed a significant restocking, with all major card families now available at retailers. We believe the ‘reopening’ is the biggest driver of these changes and presents a potential intermediate-term narrative risk going into the quarter,” he adds.
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However, Rolland believes weakness in this segment could be offset by strength for data center, which has become even larger than NVDA’s gaming segment. “Healthy underlying demand for NVIDIAâs products is being driven by hyperscale cloud computing, AI workloads, natural language processing, deep recommender models and vertical Enterprise products,” he says.
Rolland is expecting NVDA to report earnings of $1.30 per share and revenue of $8.1 billion in its first quarter. This compares to consensus estimates for earnings per share of $1.29 (+41.6% YoY) and revenue of $8.1 billion (+43.4% YoY).
Dollar General Stock Spirals Ahead of Q1 Earnings
Dollar General is another retailer that will report earnings this week, with first-quarter results from the discount chain expected out ahead of the May 26 open.
DG stock sold off sharply last week as negative reactions to several retail earnings sparked a sector-wide swoon. Shares of the retail stock are now down around 20% for the year-to-date and have shed almost 27% since hitting a record high near $260 in late April.
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What can we expect from Dollar General’s Q1 report?
“We believe some of the headwinds highlighted by other players last week also have negative ramifications for DG including increasing cost pressures â fuel and LIFO [last in, first out;Â a method used to measure inventory] â and mix shifts,” says Oppenheimer analyst Rupesh Parikh (Outperform).Â
And while management addressed some of these headwinds in mid-March, “we believe weather and even stronger cost pressures on the food and transportation fronts suggest incremental risk vs. prior guidance,” Parikh adds. Still, the analyst says he “would buy any dips from here.”
Consensus estimates are for Dollar General to report earnings of $2.33 per share (-17.4% YoY) in its first quarter on revenue of $8.7 billion (+3.6% YoY).
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All You Need to Know About Variable-Rate Certificates of Deposit (CD)?
A variable-rate certificate of deposit (CD) is a financial product that locks up your money for a set period of time (or term) and has a fluctuating interest rate. This varying rate of return is what sets it apart from traditional CDs, which pay a fixed rate, so you know exactly how much money your […]
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